MFC records a profit as a mining finance house

Fewer than two years from its inception, MFC Mining Finance Corp has emerged as a profitable mining finance house, with interests in two operating gold mines. For the year ended Dec 31, mfc generated revenue from gold and silver sales of $24.6 million. Net income totalled $3.5 million or 29 cents per share. This compares to a net loss of $166,933 or 1 cents per share realized in 1985.

A gauge of the company’s success is its working capital position at year-end — $10.4 million. The figure is almost equal to the $11 million in equity which mfc injected into its two projects, and which has since been recouped from precious metals sales.

The two projects are the Blackdome gold mine in B.C., and the Stibnite mine in central Idaho. The Blackdome mine, owned 100% by Blackdome Mining Corp., a 50.3%-owned mfc subsidiary, produced 29,807 oz of gold and 78,861 oz of silver during the last seven months of 1986. The mine entered production in May, 1986. Not only has the mine paid dividends totalling 35 cents per share during its first nine months of operation, but reserves have been increased to 276,000 tons grading 0.72 oz gold and 2.58 oz silver.

Barrier Reef, a wholly-owned subsidiary of mfc holds a 50% interest in the Stibnite mine — a low-grade seasonally operated heap leach mine in Idaho. During the 6-month operating season in 1986, the mine produced 30,075 oz of gold and 15,237 oz silver. The property hosts a mineral inventory of 1.5 million tons grading 0.051 oz gold per ton.

Changes, however, to the successful management team at mfc may be effected in the near future. A control block of mfc stock, previously held by Kerr Addison Mines, has been sold for more than $25 million to Brohm Resources, a Vancouver-based company.

Mfc President Douglas Nicholson, the principal architect behind the rapid success at mfc was unable to comment on a possible management change. Before being involved with mfc, Mr Nicholson was a respected mining analyst with Alfred Bunting and Co. in Toronto. He is credited as being one of the first mining analysts to recognize the importance of the Hemlo discoveries. In 1985 he wrote the first positive assessment of the Chetwynd gold discovery in Newfoundland, which is entering production this year.